Search advertising is something that can certainly pay off, as millions of users go to Google on a daily basis to find information on something they need right away. So, of course, various retailers will boost said advertising in the hopes of drawing in more consumers – and it appears that online retailer Amazon is leading the pack.
Even though the Amazon site acts as a rival for online ad dollars against Google, it’s managed to spend nearly $158 million on Google U.S. search ads last year, according to a report from Ad Age DataCenter, based on data from AdGooroo, a Kantar Media company that deals with search marketing.
Amazon engages with other sites when it comes to selling search and display ads, which makes it a competitor to Google – thus making the investment of search advertising on its rival’s page a bit more interesting. However, it’s a small price to pay, as Amazon has managed to generate $750 million from worldwide advertising revenue, a number it plans to increase this year to just over $1 billion, according to eMarketer.
The top 25 U.S. search ad buyers alone spent $1.34 billion on generating ads through the Google site alone, including the likes of Priceline Group, AT&T, Expedia and Microsoft rounding out the top five, followed by other companies like Walmart, Comcast and Best Buy, each with values ranging from $38 million to $82.3 million.
Amazon spends quite a bit in general when it comes to search advertising, investing $19.5 million in search ads and $1.2 million in ads for Microsoft’s Bing service for July 2014 alone, according to AdGooroo.
Surprisingly not high on the list, however, are retailers. While mainstays like Wal-Mart, Best Buy and Sears are present, none of them get close to the top five. This is mainly due to the fact that search is the dominant digital-ad format for direct-response advertisers, such as retail brands. However, their costs for said ads is likely to double within the year, according to eMarketer.
Product-search service Google Shopping appears to be a big avenue for these retailers, according to AdGooroo CEO Rich Stokes. “Retailers are underrepresented (in the top-25-search-spenders ranking), but that makes sense because of PLA (or Product Listing Ads),” said Stokes. The company didn’t research spending in this department.
What do you think Is it a little strange that Amazon would spend money through its competitor to gain ad exposure, or is it a solid business practice